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I have no idea why the discredited European commission – which we did not vote for – is allowed to have anything to do with our banks.

@KennethM

the part that worries me is that elected national politicians seem willing to take orders from the unelected Politburo (which you call Commission). Elected national politicians should not be subject to scrutiny from the Politburo or be forced to submit requests for approval to it. I didn't vote for this setup either.

mvr512 - Netherlands

The new Secretary of State for Business, Innovation and Skills, Vince Cable, has shaken up Scotland, not that there would be anything wrong with this IF
1. the problem had been correctly identified and
2. the solution solved the real problem.
Vince Cable made it clear that the status quo is not an option and that more needs to be done to get Scottish banks to lend again.
There was clear evidence that banks were failing to lend to small and medium-sized enterprises in Scotland, and there was a lack of competition in banking in Scotland.
Let's go back to 2007: banking and financial services in Scotland employed thousands of people. Median earnings in the sector were well over 25% more than median earnings in other industries. Scotland had gross exports of financial services of about £5B, with some £1B of that being overseas. Scotland was home to one of the world's largest banks—RBS. RBS had profits of nearly £7B per year and assets of more than £1.5T.
Now let's go forward to 2009: economic collapse, financial catastrophe.
The failure of the financial institutions did not rest on management alone, but on auditing, regulation, poor political acumen, and rating agencies.
What happened to Scotland between 2007 and 2009:
Into the Scottish market (as well as so many others) came tangled derivatives, credit default swaps, negative hedging, CDOs, etc.
1. There is the bank that originates the loan. It makes its bit of money on that loan and then sells the loan to another bank for a profit so that it can lend more money to other people to send off for profit and earn bonuses. The second bank then securitises that loan, slicing and dicing it into something like a collateralised debt instrument, which it then sells on for profit for even more bonuses. Those collateralised debt instruments are then traded for a profit and even more bonuses as if they had some intrinsic value in themselves. However, in the end, the only real value here is in this sliced and diced piece of junk is the value of the original loan.
2. In the field of finances, never had so much money been owed to so many by so few. Witness sub-prime mortgages.
In Scotland far-reaching changes to regulation are needed to ensure that such instruments never again get to play heck with the Scottish economy. The second issue to fix is banks being too big fail (because failing banks always come home to take their last breath).
Opportunities to address these real problems are being addressed with the wrong answer: the process of divestment and sale of parts of RBS and Lloyds Banking Group. (Both required state intervention to survive as did the largest building society—Dunfermline Building Society — being sold off by the Bank of England).
I believe this has been a wrong approach.
One fundamental problem of the credit crunch has been failure to lend. That is not unique to Scotland—it has been a feature of many economies through the downturn.
Why?
I believe the failure to lend is due to banks not kmowing their true level of capitilization. i.e. "fear".
Why?
Because international financial trading has allowed American instruments to slither in through the back door of foreign banking, instruments like derivatives, credit default swaps, CDO, etc. Go back to item 2. above: In the field of finances, never had so much money been owed to so many by so few.
These instruments (still sitting on the books in one form or another)must be identified, segregated, written off, or otherwise processed so that banks will have clear, transparent and valid levels of capitilization...and could without doubt face a stress test.
My answer:
Audit, identify, segregate the American garbage and establish regulations to prevent the future slithering of such garbage e.g. Germany’s making illegal trading in credit default swaps.
This will revert Scotland and other European banks to item 1. above:
Going back to 2007, banking and financial services in Scotland employed thousands of people. Median earnings in the sector were well over 25% more than median earnings in other industries. Scotland had gross exports of financial services of about £5B, with some £1B of that overseas...

I really think life would be better without banks at all! Why do I have to pay them just to keep my record on the computer? it's not the 50's and they don't keep it on special folders anymore... Maybe they just have to be more . My local bank wants me to install it's iphone app, but this is just to make me use it more frequently...